Cardinal Dolan to Lobby for Tax Credit That Rewards Donations to Education

A proposal to create a state tax credit for donations to public schools and nonprofit scholarship funds is gathering steam in Albany and turning the archbishop of New York, Cardinal Timothy M. Dolan, into something of a lobbyist.

The proposal, called the education investment tax credit, would create a generous new state tax credit for individuals and corporations who donate money to public schools, or to scholarship programs that help poor and middle-class students attend private schools, including religious ones. That is a far more lucrative benefit than the deduction that now exists for such contributions.

Supporters say the bill would help public schools struggling to keep class sizes down, parochial schools that have been losing students for years and students who cannot afford private school tuition.

Cardinal Dolan has spoken and blogged on the topic and batted “cleanup,” as he put it, at crowded rallies around New York to support the proposal. On Tuesday, he plans to take his plain black clerical suit — no cassock or robe — on the road to Albany for one last push before the state’s April 1 budget deadline.

“Anything we can do to help education, to help our kids, we want to do it as vigorously as possible,” Cardinal Dolan said at a news conference at Cathedral High School in Manhattan last week. “And I don’t know of a bill that does that better than the one that we’ve got now.”

He added: “Is not education supposed to bring us together? And, unfortunately, today it seems a sign of division.”

Indeed, though 17 labor unions support the plan, saying it would help children of their members, leaders of those representing teachers see it as a thinly disguised voucher program redirecting state revenue to private schools. On Friday, hours after the State Senate approved plans to include the policy in this year’s budget, Richard C. Iannuzzi, president of the New York State United Teachers, said it was a “fundamental and disgraceful attack” on public school pupils.

The lawmakers, he said, “have chosen their benefactors, hedge funders and financiers over the 97 percent of New York’s children who attend underfunded public schools.”

In New York, the lobbying and public relations efforts have been paid for, in part, by the Coalition for Opportunity in Education, an advocacy organization founded by Peter M. Flanigan, an investment banker and former aide to President Richard M. Nixon, and the hedge fund billionaire Bruce Kovner, said Bob Bellafiore, a spokesman for the initiative’s supporters.

“This was done as part of a concerted effort to counter the political spending by the teachers’ unions,” he said.

Mr. Flanigan died last year. Through a spokeswoman, Mr. Kovner declined to comment.

The general idea dates as far back as the 1970s, first as a way to address Catholic school closures, and later as the top recommendation by a commission on Catholic schools that former Gov. Hugh L. Carey headed.

Former Gov. George E. Pataki proposed a tax credit for tutoring, after school programs or private tuition, but it died in the Assembly, then as now led by Democrats. More recently Mr. Flanigan, who was among the most prolific fund-raisers for Catholic schools in the country, pushed to resurrect the idea and brought in leaders from the Orthodox Jewish and Lutheran communities, said Mr. Bellafiore.

In 2012, a bill introduced in the State Senate was changed from earlier versions to broaden its appeal, including public schools for the first time. It also added a tax credit worth at least $100 for teachers who bought their own classroom supplies. “We need to give parents relief when it comes to education and we need to give them choice,” said Senator Martin J. Golden, a Republican from Brooklyn who is the bill’s Senate sponsor. The bill passed in the Senate by a 55-to-4 vote.

A similar bill has moved through the Assembly for the past five years, but never reached the floor for a vote.

“I am sympathetic to alleviating the costs for parents,” the Assembly speaker, Sheldon Silver, said. “But the way to do that is through existing channels and not through a method that would allow tax dollars to be diverted away from critical needs.”

Still, Assemblyman Michael J. Cusick, a Democrat from Staten Island who is the bill’s main sponsor in that chamber, is holding out hope.

“We believe we have momentum,” he said. “I believe it will be part of the budget negotiations.”

A sticking point has been the inclusion of charter schools, which are not included in Mr. Cusick’s measure but are included in the Senate version. Matthew Wing, a spokesman for Gov. Andrew M. Cuomo, said the governor had not yet decided whether to support either version.

In both versions, credits for individual taxpayers would be capped at $1 million.

The total amount of donations in any year would be capped, with the amount ranging from $150 million to $300 million, depending on the version of the bill. Before giving, donors would have to file an application with the state, and if too much money was being offered, everyone’s proposed contributions would be equitably trimmed.

Backers of the bills note the dozens of tax credits in New York that provide total tax breaks of nearly $4 billion, arguing this one would be small by comparison.

“This bill would enable increased charitable donations and scholarship opportunities for children in poverty and middle-class households,” said Joseph Zwilling, a spokesman for the Archdiocese of New York, “so that parents would have additional financial means to continue to send their children to nonpublic schools that best meet their needs.”

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